Copyright Infringement: High Court Grants Permanent Injunction To Microsoft, Awards Hefty Damages

INTRODUCTION

Recently, in the case of Microsoft Corporation & Anr v. Rupesh Waidande & Anr, the Delhi High Court restrained a Mumbai-based firm from illegally using the software programmes of the Plaintiff. Further, the Court granted a permanent injunction and awarded damages amounting to INR 20,00,000 (Approximately USD 24,180) in favour of the Plaintiff and its Indian subsidiary.

Founded in 1975, the Plaintiff is a global software publisher for personal and business computing. The software products of the Plaintiff include operating systems for servers, personal computers, and intelligent devices. The popular software products of the Plaintiff include the ‘Microsoft Windows Operating Systems’ (various versions), application software such as ‘Microsoft Office’ and development tools like ‘Visual Studio’ and ‘Visual C++’. The Plaintiff has a family of “Microsoft Windows’ and ‘Microsoft Offices’ which includes various software tools and versions. These software programmes are installed and used on millions of computers all over the world, including in India. The Plaintiff licenses the computer programs in a soft version of the ‘End-User License Agreement’, ‘Registration Card’ and other relevant ‘User Manuals’.

It was submitted by the Plaintiff that the software programmes developed and marketed by them fall within the definition of ‘computer programmes’ under Section 2(ffc) of the Copyright Act, 1957 (hereinafter the ‘Act’) and are also included within the definition of a ‘literary work’ under Section 2(o) of the Act. It was further asserted by the Plaintiff that the Supplementary User Instructions and Manuals supplied along with the software also fall within the ambit of ‘original literary works’ as contemplated under Section 2(o) read with Section 13(1)(a) of the Act.

The Plaintiff submitted that because the computer software and the final version of the End-User Agreement and Manuals are created by the employees of the Plaintiff in the course of employment, the Plaintiff is the first owner of the copyright vested in the aforementioned works under Section 17(c) of the Act.

Further, in the plaint, it was stated that since both the United States of America and India are member-countries of the Berne Convention, the Universal Copyright Conventions, and the World Trade Organization (WTO), the rights of authors in the United States of America is protected in India under the aegis of Section 40 of the Act read with the International Copyright Order, 1999.

BACKGROUND

It was the case of the Plaintiff that the Defendant was illegally using their software programmes including Microsoft Windows, Microsoft Office, and Windows Server for commercial purposes at their offices. On the basis of the enquiries conducted by the Plaintiff, it was learnt that the Defendant had 130 computer systems at their registered office and most of the said installations had the Plaintiff’s software programmes installed in them. Further, the licenses held by the Defendant did not match with their usage, indicating that the Defendant was indulging in the unlicensed use of the Plaintiff’s computer programmes.

The Plaintiff, thereafter, repeatedly requested that the Defendant conduct Software Management Assessment Review Program to comprehensively evaluate the extent of the piracy of the Plaintiff’s software. However, despite repeated follow-up requests made by the Plaintiff, the Defendant did not respond to the said requests.

The Court vide order dated May 24, 2010 granted an ad-interim ex-parte injunction in favour of the Plaintiff, restraining the Defendant from infringing the Plaintiff’s software program. Further, the Court appointed a Local Commissioner to investigate the extent of the alleged infringement. Subsequently, the parties were referred to the Delhi High Court Mediation and Conciliation Centre to settle their disputes amicably. However, the parties failed to do so. In 2018, the Defendant proceeded ex parte.

It was submitted by the Plaintiff that the unauthorized installation and use of the Plaintiff’s software on the computer systems of the Defendant amounts to an unauthorized reproduction of the Plaintiff’s copyrighted software and consequently, resulted in infringement of the Plaintiff’s copyright under Section 51 of the Act. It was further stated that the Defendant had 130 installations of the Plaintiff’s software programmes, out of which they only hold approximately 46 bona fide licenses for the said software programmes.

FINDINGS OF THE COURT

The Court noted that the Plaintiff was able to prove their copyright ownership in the computer programs and the Supplementary User Instructions and Manuals through their Copyright Registration Certificates. Therefore, the Plaintiff and the Indian subsidiary of the Plaintiff “are entitled to the exclusive rights flowing from such ownership as set out in Section 14 of the Act.”

Further, the report submitted by the Local Commissioner also stipulates infringement on the part of the Defendant, along with their blatant attempt to destroy evidence of their infringement. Therefore, the Court opined that “the Defendants had failed to show proof of genuine use of the Plaintiffs’ software programmes for all the installations that were in use at their organizations. Therefore, from the evidence led, it is evident that the Defendants have infringed upon the copyright of the Plaintiffs in their software programmes.”

In view of the aforementioned findings, the Court granted a permanent injunction in favor of the Plaintiff and its Indian subsidiary, and awarded damages amounting to Rupees 20,00,000 (Approximately USD 24,180). Also, a decree of delivery-up was passed in favor of the Plaintiff.

CONCLUSION

Many businesses resort to software piracy to save money on expensive licenses without realizing the legal and economic implications. In this case, the Court has taken a firm stand against the Defendant, who was found to be not only infringing the rights of the copyright holder but also attempting to destroy the evidence of their infringement. Moreover, damages awarded in such cases are all the more necessary to limit the threat of software piracy.